What’s the Difference Between Audi and Lexus?
January 31, 2022
Luxury car buyers might not be focused on their budget constraints when shopping. Instead, they may be looking for the car with the most impressive features. Statista reported that in 2020 the top five luxury auto brands were BMW, Lexus, Mercedes-Benz, Audi and Cadillac. The top three brands were nearly neck and neck in sales, with a few thousand units separating each. Buyers may wonder, though, how Audi and Lexus compare? What’s the difference between Audi and Lexus? Are their prices comparable? Each luxury manufacturer may have its own unique features. Some may be a bit more similar than others. Price points also may vary depending on the model. For example, an SUV will likely be priced higher than a compact model. When comparing brands, it may be more beneficial to highlight their most popular models. Club Lexus reports that the top three selling models ever are the Lexus IS, Lexus ES, and the most popular model is the Lexus RX (which has sold more than two million units). Hot Cars ranked the Audi models, and the top three picks were the Audi Q8, Audi E-Tron, and the Audi RS6 (which was ranked in the number one spot). ALL ABOUT LEXUS Lexus is Toyota’s luxury brand and, therefore, is technically an import (from Japan). Lexus is one of the most popular luxury brands in the U.S. Of all the 2021 models, the Lexus UX SUV is the least expensive model in the lineup, with a base price of $32,900. The most expensive Lexus model is the 2021 Lexus LC (500 h), with a base price of $98,635. LEXUS IS Lexus’ third most popular model, the IS, is known as a sport sedan and offers a base price of $38,625. The IS features an advanced safety system that includes pre-collision system that detects pedestrians, lane-tracing assist, lane monitoring that offers steering assist, high beams that adjust when it detects other vehicles and more. The Lexus IS received a Top Safety Pick+ safety rating from the Insurance Institute for Highway Safety (IIHS). This is the highest safety rating awarded by the IIHS. LEXUS ES The Lexus ES is a midsize sedan that is offered in both a standard and hybrid option; the hybrid has a base price of $41,900, but the standard ES is priced slightly lower at $40,800. The ES offers numerous safety features including blind spot alerts, parking assistance, rear pedestrian detection and more. The ES received a Top Safety Pick+ rating from the IIHS LEXUS RX Lexus’ most popular model is an SUV and is priced at $45,320. Like other Lexus models, it includes numerous safety features and systems. The RX also connects to Alexa and is compatible with Apple CarPlay. The 2022 Lexus RX received a Top Safety Pick rating from the IIHS. Buyers also can upgrade to the Lexus RXL which offers extra seating space for passengers (space for up to 7!). ALL ABOUT AUDI Audi is owned by Volkswagen Group out of Germany. Motor Trend reported that Audi’s A3 was the least expensive model in its lineup with a base price of $33,900. The most expensive model is the Audi R8 Spyder at $160,900. AUDI Q8 The Audi Q8 is one of Audi’s SUV models. With a starting price of $70,300, the Q8 is priced much higher than Lexus’ RX. The Q8 is decked with features, including a 360 degree camera system that allows the driver to see all around the car to aid in navigating tight areas. Like many of the Lexus models, the Q8 also offers lane navigation assistance. The Q8 also automatically keeps the vehicle safely and properly distanced from other vehicles during busy traffic situations. AUDI E-TRON Audi denotes its electric models as e-tron, and the brand has numerous electric models in its lineup. The Audi Q4 e-tron starts at $43,900. This smaller SUV can fully charge in a little over half an hour. Audi also just has an SUV called the e-tron, and this model has a base price of $65,900, With a towing capacity of 4,000 pounds, the e-tron also is capable of towing small loads. The e-tron has a driving range of 222 miles, which denotes how far it can travel on a fully-charged battery. Both the Q4 e-tron and the e-tron have enough space for up to five passengers. AUDI RS6 AVANT The RS6 was introduced in 1993, and the Audi RS6 Avant is a bit of an upgrade on the namesake. With a base price of $116,500, the RS6 Avant is a luxury investment. This model, though, isn’t a sedan and it also isn’t an SUV—it’s a wagon. It boasts a range of safety systems, including 360 degree cameras to view from every angle. LEXUS VS. AUDI The Lexus buyer might not be the Audi buyer. Both brands are luxury offerings, but buyers may opt for one over the other for different reasons. Some are brand loyal; those who have driven Toyotas in the past and trust the brand might opt for Lexus when making their luxury purchase. Features are different for both brands. Buyers may want to explore the standard offerings to find what brand offers what they need for standard safety systems. Buyers should know, though, that as the price increases with different models, these features usually expand as well. Deciding which brand comes out on top might be a matter of buyer opinion. However, Lexus is the better selling brand in the United States. In 2021, Lexus led sales over Audi by nearly 100,000 units. Audi does have a major edge over Lexus, though. Audi offers electric models, but Lexus only offers hybrids. However, Lexus will be electrifying the competition very soon. Newsweek reported that Lexus’ new electric model—denoted as the RZ450e—is expected to debut later this year. Tesla’s Luxury Offerings [https://blog.relaycars.com/wp-content/uploads/2022/01/Teslas-Luxury-Offerings.jpg] TESLA’S LUXURY OFFERINGS In the quest for the perfect luxury vehicle, Lexus and Audi are among many brands on the must-have list. BMW is the top-selling luxury brand in the United States. However, while it might be the top selling brand, it doesn’t produce the best-selling luxury vehicle in the U.S. According to Motor Trend, Tesla Model 3 was the number one selling luxury vehicle in 2020. While Statista didn’t show Tesla on its leader board of luxury car brands, Tesla might be edging out the competition. According to Insider, Tesla was the third most popular luxury brand behind BMW and Lexus. Tesla’s electric lineup includes varying price points for different buyer budgets. The least expensive is the Tesla Model 3, which has a base price of $44,990. The Model 3 also has the shortest range at 272 miles. However, the longest range Tesla is the Model S, which can drive up to 405 miles on a full charge. The Model Y and Model X are the roomiest Tesla models, seating up to seven passengers. The Model X Plaid also is the most expensive model, with a base price of $119,990. What’s the Difference Between Audi and Lexus [https://blog.relaycars.com/wp-content/uploads/2022/01/What-is-the-Most-Expensive-Luxury-Car.jpg] WHAT IS THE MOST EXPENSIVE LUXURY CAR…IN THE WORLD? While the top three brands in the U.S. are BMW, Mercedes and Lexus, these three brands don’t produce the most expensive car on the market. What’s the most expensive luxury car in the world? The Bugatti La Voiture Noire wears the diamond crown as the most expensive car in the world. With a price tag of $18.7 million, this luxury car is beyond an investment. It’s also probably not a car that any buyer is going to take on the street daily. Imagine the insurance premiums! While La Voiture Noire is the most expensive car in the world that can be purchased, it isn’t the highest priced car ever purchased. Autoweek reported that the most expensive car sold at auction in 2018. The vehicle purchased was the 1962 Ferrari 250 GTO by Scaglietti, and it sold for $48.4 million. The site noted that another GTO sold for more than $70 million through a private sale. FIND THE BEST LUXURY VEHICLE WITH RELAYCARS Car buyers looking for the best luxury vehicle can begin their search via RelayCars. Use the site to explore all the different luxury makes and models via 3D imagery and even augmented reality. Use the camera on a mobile device to drop the vehicle anywhere in the real world environment. Preview vehicles in the garage, or see how the Tesla Model X looks in the driveway. Using RelayCars, buyers can explore vehicles from all angles. Not only can buyers use augmented reality to preview vehicles, but they also can explore 3D models right on the screen. Swap out the paint colors to see all the available color options. RelayCars also lets buyers find the right car for their budget, too. Search inventory to find the best car at the right price. RelayCars gives buyers explorative options for previewing and lets buyers find the car that fits their lifestyle and finances. RelayCars features all the tools buyers need to research and buy the luxury car of their dreams.
Do Car Owners Pay Taxes on the Proceeds of a Car Sale?
January 28, 2022
When an older car isn’t in use, the owner might not be interested in holding onto it and paying for upkeep. Selling a car privately or to a dealership could help an individual have money for the down payment for a newer model, but, sometimes, the car is simply taking up unnecessary space in the garage or the driveway. Selling a car privately can be a process. Once the owner has made the sale, though, are there any tax implications? Do car owners pay taxes on the proceeds of a car sale? There are multiple tax responsibilities that might be applicable in buying, selling or owning a car, including: * Sales tax * Personal property tax * Capital gains Tax Do Car Owners Pay Taxes [https://blog.relaycars.com/wp-content/uploads/2022/05/Who-is-Responsible-for-Paying-Sales-Tax.jpg] WHO IS RESPONSIBLE FOR PAYING SALES TAX? When buying a car, sales tax might add to the cost of the purchase. Some states don’t apply sales tax to car sales but others do. Who pays the sales tax? In states where car sales are taxed, the individual responsible for paying the tax is the buyer. The amount of tax may be dependent on a number of factors, though. In some states where sales tax is applied, the tax might be rolled into the loan. However, this isn’t always the case. Buyers might realize that they are on the hook for the full amount of sales tax when trying to title and register their car. When purchasing a car in a state where vehicle sales are taxed, buyers can prepare for their tax obligation by researching the tax rates and calculating how much they might owe on a particular purchase. Preparing for the sales tax hit might be necessary so that car buyers can review their finances to determine how they will pay the tax. For some car purchases, car buyers might owe a large tax bill. Don’t be surprised by a tax bill—do the research! PERSONAL PROPERTY TAX While not all states tax vehicles as part of personal property, states that tax car owners for their vehicles might require the property taxes to be paid yearly. In addition, some states stipulate that these tax receipts must be shown at the DMV to register the vehicle for new tags. Property owners—or car owners—are required to pay this tax in applicable states. Those living in states that tax car ownership yearly are typically accustomed to paying this tax. However, depending on the make/model owned, the tax could be pretty expensive. Unfortunately, personal property taxes are due at the end of the year. This means that while car owners are holiday shopping and trying to pay for holiday purchases, they also face a tax bill. CAPITAL GAINS TAX A capital gains tax could apply to the sale of the vehicle when the purchase price exceeds the car’s value. Investopedia explains that capital gains taxes might apply to classic or collectible cars. For capital gains taxes, the seller has to pay. While most standard vehicles won’t sell for more than they are worth, a certified public accountant (CPA) or tax professional can help car owners understand any capital gains responsibilities. Do Car Owners Pay Taxes [https://blog.relaycars.com/wp-content/uploads/2022/05/Research-the-Value.jpg] BEFORE SELLING A VEHICLE, ALWAYS RESEARCH THE VALUE Car owners who want to sell their vehicle need to research their car’s value to better understand what price they might receive or to determine a fair sale price. Not all car owners want to handle a private sale, and they might prefer selling to a dealership or even use their car for a trade-in to purchase a newer model. Even when a car owner is using their car as a trade-in, they still need to research the value of the vehicle. Going into a sale without knowledge could lead to a car owner accepting a low offer and not receiving the best price for their vehicle. Car owners can use Kelley Blue Book (KBB) to research the resale value of their car or find the trade-in value. The resale value will be higher than the trade-in value, as the trade-in value must account for a dealership’s profit margin. While a private buyer will use the car for their own purposes, the dealer’s interest in the car is in its resale price. Car owners who want to sell their car to the dealership—not trade it in—also can refer to the trade-in price. Again, dealerships don’t buy cars to use personally, they buy cars to resell. This will impact how much they can offer for the vehicle and why the trade-in value is applicable when selling a vehicle outright to a dealership. While a dealership might offer less than a private buyer, the process could be much easier and less stressful for the car owner. However, car owners need to be educated about the value of their vehicle, and this is where KBB becomes an extremely valuable tool. When using KBB to find the trade-in value, the site will prompt the car owner to enter their vehicle’s VIN number, license plate info or just the make/model. Car owners need to include details about their vehicle’s trim and check off any applicable features if the vehicle isn’t a base grade. KBB also will ask the buyer about the condition of the vehicle. While it may be tempting for car owners to be optimistic about the condition of their car, it’s best to use a more critical eye when determining condition. The condition will impact the overall value of the vehicle; not being honest when determining the condition could lead to an inflated price estimate. Remember, the purpose of using KBB is to obtain the most accurate value for the vehicle. If the condition is fair and the owner is trying to argue for a price on a good or excellent condition automobile, they’re probably not going to win the negotiation with a dealership. If the dealership offers a low-ball price for a vehicle that has been valued much higher by KBB, car owners also might walk away. Knowing how much the car is worth can help car owners not feel underpriced when trying to sell the vehicle. In times of great demand, though, car owners might be surprised to learn that their car is more valuable to dealerships. Certain areas might have a need for popular models. Demand also could impact how much the vehicle is worth to a dealership. KBB typically provides a price range, though, to accommodate for varying valuations. DON’T SELL A DIRTY CAR TO GET THE BEST PRICE Those who want to get the best price for their vehicle also need to maintain the vehicle. Wash and wax the car before selling it. In addition, car owners might decide to have the vehicle professionally detailed. A car that looks amazing inside and outside will be more appealing to any buyer. In addition, sellers need to disclose any mechanical issues or they need to repair those issues. Keep the receipts and any info from the mechanic, too. Do Car Owners Pay Taxes [https://blog.relaycars.com/wp-content/uploads/2022/05/Electric-Cars-and-Taxes.jpg] ELECTRIC CARS AND TAXES While personal property tax, sales tax and capital gains tax are the three major taxes that can affect car buyers, sellers and owners, there might be a tax benefit for certain car owners. Electric cars that plug-in may be eligible for a tax credit. A tax credit is different from a tax deduction. A credit can help reduce the taxes owed, while a deduction helps lower taxable income. The credit for electric cars varies because the credit phases out after so many qualifying vehicles are sold by a manufacturer. However, many models are still eligible for the full credit of $7,500. Car buyers who are interested in exploring different electric models can download the RelayCars mobile app to preview electric vehicles in virtual reality (Google Cardboard is required) or using 3D on-screen interactive models. Users can turn the car around to view it from any angle and they can swap out the paint color, too. In addition, the RelayCars app also partners with CarSaver.com, which can help buyers find the car they want at the price they need. TAXES CAN BE TAXING FOR CAR SELLERS AND BUYERS While car owners who are selling their vehicles typically don’t need to worry about taxes related to the sale of the vehicle, they could be on the hook for capital gains taxes for a vehicle that sells for more than its value. Buyers of a new or used vehicle, however, might have more tax liabilities. Sales tax in states that tax the sales of vehicles could leave a buyer with a large bill—especially if the tax can’t be rolled into a loan. In addition, yearly personal property taxes could be an additional cost of car ownership in certain states. Car owners who plan to sell their car and have questions related to their tax responsibilities should reach out to a tax pro. Tax responsibilities also vary by state; to better understand any tax liabilities associated with buying or selling a car, car owners also should investigate the tax guidelines in their state.
This is the Most Energy-Efficient Tesla Model
January 26, 2022
Electric vehicles are the most energy-efficient options on the market, but consumers who are conditioned to look at miles per gallon (MPG) data of vehicles to determine fuel efficiency may wonder how to calculate the cost to operate an electric vehicle. Instead of miles per gallon, consumers may look for a figure called miles per gallon equivalent (or MPGe). The vehicle’s range also denotes how far the car can drive when fully charged. Tesla is known for long-range electric vehicles and offers some of the most energy efficient models on the market. Looking for the most energy-efficient Tesla model? Here’s what to know about Tesla’s models and other electric options, too! IS A TESLA MODEL THE LONGEST RANGE OPTION ON THE MARKET? Tesla’s models all offer incredibly long driving range per charge, but a Tesla model does not hold the top spot for the longest-range electric vehicle. The Lucid Air Dream Edition Range (with 19 inch wheels) drives past all its competitors; the Dream boasts a driving range of 520 miles. Lucid’s models actually hold the top three spots for vehicles with the longest ranges. The Lucid Air Grand Touring has a range of 516 models, and the Lucid Air Dream Edition Performance (again with 19 inch wheels) can drive up to 471 miles. To put the range in perspective, a car owner could drive from Boston to Washington, D.C. on one full charge and have a little electricity to spare. The distance between these two cities is 440.3 miles. Could a regular car make the same trip without stopping for fuel? That depends. Many modern vehicles do offer great fuel efficiency, and some hybrid models could offer up to 60 miles per gallon on the highway. If a vehicle offers 30 miles per gallon on the highway and has a 15 gallon tank, it would be able to drive about 450 miles before needing to refuel. While driving ranges from a fully charged battery and a full tank of gas could be comparable, the prices to energize those drives are not. Electricity may cost a fraction of the price of the pump. In addition, electric vehicles also are better for the environment. Most Energy-Efficient Tesla [https://blog.relaycars.com/wp-content/uploads/2022/01/What-is-the-Most-Energy-Efficient-Tesla-Model.jpg] WHAT IS THE MOST ENERGY-EFFICIENT TESLA MODEL? Tesla’s top range model actually comes in fourth place among all electric vehicles when ranked by driving range. The Tesla Model S Long Range can drive up to 405 miles fully charged. The Model S Long Range has a base price of $89,990. This is nearly half the price of the Air Dream Edition Performance; the model is priced at $169,000. The Tesla Model 3 Standard Range Plus offers the shortest driving range of all Tesla models. The Standard Range can drive up to 262 miles per charge. However, it also comes with a more affordable price tag than Tesla’s other models; the Model 3 Standard Range has a base price of $43,490. WHAT ELECTRIC CAR HAS THE SHORTEST RANGE? While many electric options offer decent ranges on a complete battery charge, as Car and Driver explains, ranges for many electric cars are often much less than the full distance that can be driven on a complete tank of gas. The model that offers the shortest driving range on a charge is the Mini Cooper Electric. This vehicle has a range of only 110 miles. For those with long daily commutes (50 miles roundtrip, for example), the vehicle would need to be charged about every other day. WHY IS RANGE SUCH A BIG DEAL? Drivers need to understand the driving capacity of their electric vehicle, because batteries don’t stay charged indefinitely. If the car starts to run low on energy, drivers will need to find a station to recharge. This is where driving an electric model can get a bit more complicated. Gas pumps are plentiful; car owners who drive a fuel inefficient vehicle may have to worry about the cost at the pump but they don’t have to worry about finding a gas station. Every city and even small towns offer one or more gas stations. In states like California where electric vehicles are common, it might be easy to find a charging station for electric vehicles. However, in states where electric vehicles are less popular, electric stations may be few and far between. Driving an electric car on a road trip may require the car owner to map out recharging stops along the trip so that there isn’t an issue of the car suddenly being without power. This could make a fun vacation on the road a bit more stressful, especially as drivers roll through towns and states that haven’t yet caught on to the electric phenomenon. Those who own an electric car may be limited to charging their car at home, especially if they live in areas that don’t offer many charging stations or in areas where these stations may be cost prohibitive. Most Energy-Efficient Tesla [https://blog.relaycars.com/wp-content/uploads/2022/01/The-Cost-at-the-Pump-vs.-the-Price-of-Electric.jpg] THE COST AT THE PUMP VS. THE PRICE OF ELECTRIC Most drivers don’t have to guesstimate how much they will spend at the pump. Prices are easily visible at the top of gas station signage. Some drivers know instinctively what areas offer the lowest gas prices, too. Commuters who pass through multiple towns may have a specific location to refuel. Recharging is more complicated. While gas prices may vary from town to town, the variance is typically a matter of cents. However, those cents add up for drivers who are watching their budget or who have long commutes and need to refuel often. What about the price of electric, though? To recharge an electric car, understanding how much it will cost to charge the car at home isn’t so difficult but it does require a bit of math. Kelley Blue Book (KBB) explains that car owners just need to consult their electric bill to find the price they are charged per kilowatt hour. To find this price, take the number of hours used for electricity and divide it by the amount of the total dollars charged for electricity. On average, Americans spend about 14 cents per kilowatt hour of electricity used. KBB explains that most electric vehicles drive about four miles per kilowatt hour. To better understand the cost of the electric vehicle to compare to the price at the pump, car owners should estimate how many miles they drive per month. Let’s assume an individual drives the full range of the longest-range Tesla each month: 405 miles. Let’s also assume the Tesla gets the full four miles per kilowatt hour. So divide the distance per month (405) by four miles (for kilowatt hours). The result is about 101; then multiply that by the cost per kilowatt hour (0.14). The price would be $14.14 to operate the vehicle each month. KBB uses an example of an individual driving 540 miles per month. Even with this assumption, the cost for energy would be a little more than $25. Most households own at least two cars; it isn’t unheard of for families to spend more than $200 on gas per month for commuting costs. Two electric vehicles might cost a quarter the price to operate. The price of public charging stations, though, may be more expensive. Some offer monthly membership fees, and, for some drivers, this could be a less expensive option. MotorBiscuit notes that some charge 43 cents per kilowatt hour for those without a membership. This price is still cheaper than the price of gas, though. WHAT’S THE BEST ELECTRIC VEHICLE? When considering options for an electric vehicle, buyers might look at both price and range. While Lucid offers the most energy-efficient models, the price of Lucid may be out of the budget for many buyers. The Lucid Air has a starting price of $77,400. The Air Dream Edition is the highest priced model at $169,000; however, Lucid’s website states that reservations are closed for the Dream Edition. Tesla models vary in price, but the lowest range option could be affordable for some buyers. At nearly $50,000, though, even the most affordable option might not be accessible to those who want a more economical option. What’s the least expensive new electric vehicle on the market? According to MotorTrend, the most affordable electric vehicle for 2022 is the Nissan Leaf S 40 kw; it’s offered at a base price of $28,365. For many buyers this could still fit into the budget! SHOP USED MODELS FOR THE BEST PRICES AND THE BEST RANGE Another option for car buyers on a budget to find the best electric vehicle is to shop for used models. Buyers might be able to find long-range models—including those by Tesla—at more reasonable prices. The only issue, however, may be the available selection. In many areas, car inventory can be a bit crunched. This can make it difficult to find an exact model that the buyer wants. However, buyers who have multiple options on their wish list could find a wider selection. In addition, some parts of the country have embraced electric vehicles. This could mean a more extensive used inventory of electric models. Unfortunately, the reverse also could be true. For cities that haven’t fully jolted for the electric surge, selection for used models might be really limited. Yet, the payoff for driving an electric vehicle could be worth it for the right buyer. Those who have extensive commutes might find that the price to charge the car is far less expensive than refueling at the pump. Owners of electric cars also might like the convenience of recharging at home. Drivers just have to remember to plug in for the night. Tesla offers many long-range models, and the manufacturer also offers a variety of price ranges to appeal to different buyers. While Lucid might outdrive Tesla models in range, the price for Lucid models could be far more than many buyers are willing to spend. Those on a tight budget also could look to used models to find economically priced electric vehicles. While selection might be limited in some areas, buyers may find that the search is worthwhile in order to find a car that doesn’t eat away at the monthly budget because of fuel needs. Although many electric models are pricier, the savings to operate these models could be worth the investment.
What is the Vehicle Sales Tax Deduction?
January 24, 2022
Tax day might be dreaded by some individuals. This could be the day when taxpayers have to write out a large check to the U.S. Treasury or their state. For individuals and families who have overpaid their taxes, though, tax day might mean a refund and a little extra money. Those who are looking to reduce their income might be researching applicable deductions. For individuals who purchased a car in 2021, deducting sales tax from that purchase could help out on tax day. What is the vehicle sales tax deduction? Here’s what filers need to know about this deduction. THE DIFFERENCE BETWEEN A TAX CREDIT AND A DEDUCTION Tax filers might be familiar with two key terms that affect their returns: deductions and tax credits. These terms cannot be used synonymously, though, as they impact the tax return differently. Deductions help to reduce the taxable income on a tax return. An example of this is deducting a charitable donation. A tax credit, however, reduces the amount of tax owed. A credit can lower a filer’s tax responsibility. Some credits can only reduce a tax to zero, but others can result in a refund. Credits and deductions all have specific guidelines, and it’s extremely important that tax filers follow the rules. Some expenses only can be partially deducted (denoted as a percentage); some credits have this stipulation, too. In addition, not all credits can be taken by all filers. Credits might have income stipulations or they might come with other qualifying factors. WHAT IS THE VEHICLE SALES TAX DEDUCTION? A vehicle sales tax deduction allows car buyers to deduct sales tax from the purchase of a vehicle. Not everyone can take this deduction, though. Tax filers who opt to take the standard deduction cannot deduct sales tax related to a vehicle purchase. This is due to the fact that filers must choose between either itemizing personal expenses or simply using the standard deduction. In addition, if a tax filer itemizes their deductions on Schedule A and opts to deduct state income taxes, they cannot also deduct the sales tax from their vehicle. There is also a limit to this deduction; tax filers cannot deduct more than the general sales tax rate. This means that if the tax rate was higher than the general rate, the filer can’t deduct that higher amount. Filers who deduct the vehicle tax on their business expenses cannot also deduct the expense for their personal expenses. In addition, H&R Block explains that: “There is a limit of $10,000 ($5,000 if MFS) on the amount of sales tax you can claim in 2018 to 2025. The $10,000 limit applies to the total amount a taxpayer can claim for real property taxes, personal property taxes, and state and local income taxes (or general sales tax if elected).” Confused about these deductions? The Internal Revenue Service offers a page devoted to deductible taxes. Vehicle Sales Tax Deduction [https://blog.relaycars.com/wp-content/uploads/2022/03/Are-There-Tax-Credits-for-Vehicles.jpg] ARE THERE TAX CREDITS FOR VEHICLES? While some tax filers might be able to deduct sales tax on their return, others could qualify for a tax credit. Those who bought an electric vehicle might be in luck for a tax credit related to this vehicle’s energy efficiency. The Plug-In Electric Drive Vehicle Credit has a few stipulations. The IRS explains that filers can claim this credit “…if you purchased a car or truck with at least four wheels and a gross vehicle weight of less than 14,000 pounds that draws energy from a battery with at least 4 kilowatt hours and that may be recharged from an external source.” The credit must be claimed the year that the individual started driving the vehicle, and the car must have been purchased in 2010 or after that date. The amount of the credit ranges from $2,500 to $7,500 (the amount is tied to the battery). The credit phases out when a manufacturer has sold 200,000 qualified vehicles. As with every credit, there are details guiding who can or can’t claim it. Work with a CPA to determine if the electric vehicle purchased qualifies. Again, there are limitations as outlined by the IRS. OTHER VEHICLE DEDUCTIONS For many tax filers, there aren’t many options for deducting vehicle expenses. However, for those who are business owners or who are sole proprietors, some vehicle expenses could be deductible. Before writing off vehicle expenses, though, filers should consult with a certified public accountant (CPA) or other tax professional. Again, filers must adhere to any rules associated with deductions. Business vehicle expenses often include certain stipulations for what can and cannot be deducted. Vehicle Sales Tax Deduction [https://blog.relaycars.com/wp-content/uploads/2022/03/Tax-Tips.jpg] TAX TIPS Before filling out any tax form or taking forms to a pro, keep in mind a few tax tips to help simplify the process: * Try not to wait until the last minute. Many filers procrastinate until tax day. If a pro is needed, there might be a line. Filing a little earlier also ensures that filers have time to find everything they need and get extra copies in case they are missing any forms. * Keep all receipts. When taking any deductions, be sure to keep all the receipts documenting those write-offs. If the filer is audited, receipts serve as the proof that the deduction was taken correctly. * File taxes electronically or send the returns via certified mail. If filers must mail their returns, sending them via certified mail can ensure that the filer has proof of their receipt. Vehicle Sales Tax Deduction [https://blog.relaycars.com/wp-content/uploads/2022/03/Beware-of-Tax-Scams.jpg] BEWARE OF TAX SCAMS, TOO Every year, the Internal Revenue Service alerts tax filers about any tax scams. Unfortunately, many fall prey to these scams. Here’s what to know about the most common tax scams: THE ‘YOU’RE GOING TO JAIL” TAX SCAM The popular scam plays out the same: the scammer calls an individual and pretends to be from the IRS. The robocall usually threatens that the individual will go to jail if they don’t pay. The IRS explains that it would not make jail threats via phone. Ignore this call. If an individual owes taxes, the IRS will make contact via a letter or other official communication, but they won’t leave a message that they are sending the local police. In addition, individuals can aid the IRS by reporting these calls! THE “CANCELED SOCIAL SECURITY NUMBER” SCAM Another popular scam involves calling individuals and threatening to cancel their social security number. Typically, scammers will ask for a payment of back taxes. Don’t fall victim to this scam! Report any strange calls. THE GHOST PREPARER SCAM What is a ghost preparer? This is a term to denote a dishonest and unethical tax preparer that will not sign off on a return. The lack of the signature is why they are called ‘ghost preparers.’ Be wary of any preparer who promises a certain refund or who schedules their fees based on the amount of a filer’s refund. The IRS also explains on its website that scams can happen all year not just during tax time! OTHER WAYS FOR CAR OWNERS TO SAVE While a car buyer might not be able to deduct the vehicle’s sales tax, there are other ways to save with a vehicle that have nothing to do with a tax return. While tax day might signal the time for a refund, others find that they owe taxes and this could dent their budget. For those who might have a budget crunch, here’s how to save on car expenses: * Download apps that help locate the cheapest gas in town. The savings might only be a few cents, but it could add up. * Be on the lookout for coupons for oil change businesses. Jiffy Lube and others could mail out coupons or offer coupons online that save car owners money on basic services. Some businesses might have loyalty programs, too. * Consider memberships to stores that offer lower gas prices. Sam’s Club and Costco both offer their own fuel pumps to members, and the prices can be much lower. Car owners who live near stores that offer this service could consider a membership. * Consider refinancing a car loan with a high interest rate. Credit scores could improve over time. If the original interest rate was high, car owners might shop around for better rates if they have seen a bump in their credit score. Tax time might be daunting for filers, but a vehicle might help offset the taxes owed or decrease the individual’s taxable income. However, individuals claiming a tax deduction related to a vehicle’s sales tax cannot also opt to take the standard deduction. In addition, the sales tax deduction for a vehicle also cannot be used if the individual deducts income taxes. When taking any deduction or claiming a credit, there are stipulations and guidelines outlined by the IRS that filers must follow. Work with a CPA or tax professional to better understand these credits and deductions and know when it is applicable to claim or use them. In addition, all tax filers should be on the lookout for tax scams and ghost preparers. Beware of any preparer who promises a refund, and report any scam caller claiming to be the IRS.
How to Declare Your Vehicle A Business Vehicle for Taxes
January 21, 2022
It’s tax season, which means it’s the time of year when everyone is looking for ways to save. If you want to save as much money as possible, it’s important to take advantage of the tax deductions that are available to you. For example, if you use your vehicle for business purposes, you may be eligible for a tax benefit. The rules regarding how to declare your vehicle as a business vehicle for taxes are complex. However, learning the rules and how they apply to your situation can pay off in a major way when you file your taxes. Here’s everything you should know: HOW TO CALCULATE YOUR VEHICLE’S DEDUCTION There are two different methods you can use to calculate your vehicle’s deduction when preparing your taxes. Your options are: * Standard Mileage Rate * Actual Expenses STANDARD MILEAGE RATE The standard mileage rate is the simplest and most straightforward method of calculating your business vehicle’s deduction. To use this method, you must keep track of how many miles you travel in your vehicle for business purposes throughout the course of the year. Some examples of miles traveled for business purposes include miles driven: * To visit a current or prospective client. * To meet with an accountant, lawyer, or another professional regarding business matters. * To the bank or office supply store. Some examples of travel that should not be included when calculating your deduction are miles driven: * To and from work. * To and from a restaurant on your lunch break. Once you figure out how many miles you traveled for business purposes, you can calculate your deduction. The standard mileage rate is currently $0.56 per mile. So if you traveled 10,000 miles for business purposes, for example, your deduction would be $5,600 (10,000 miles x $0.56=$5,600). If you choose this method, you can also deduct other vehicle-related expenses, including interest on your auto loan, registration, parking, and tolls. However, you must be able to prove that the parking and toll expenses were incurred while using your vehicle for business purposes. Business Vehicle for Taxes [https://blog.relaycars.com/wp-content/uploads/2022/03/Actual-Expenses.jpg] ACTUAL EXPENSES This method allows you to deduct any expenses that are related to your vehicle. Some examples of expenses you can deduct when using this method include: * Gas * Maintenance and repairs * Registration * Taxes * Interest on your auto loan * Lease payments * Tolls and parking fees * Rental car fees * Insurance * Tires * Depreciation You cannot deduct 100% of these expenses, though. You can only deduct a certain percentage. To calculate the percentage you can deduct, you need to figure out the percentage of use that your vehicle was used for business purposes. For example, say your gas, maintenance, repairs, interest, and other auto-related expenses totaled $5,000 for the year. You put 20,000 miles on your vehicle over the course of the year. However, only 10,000 miles were traveled for business purposes. This means you used your vehicle for business purposes 50% of the time. Because your vehicle was only used for business purposes 50% of the time, you can only deduct 50% of your auto-related expenses. So if your total expenses were $5,000, you can deduct $2,500. It’s much harder to calculate your business vehicle’s tax deduction using the actual expenses method. However, some people are able to save money by choosing this method over the standard mileage rate method, which is why you should consider it when preparing your taxes. You may want to calculate your deduction using both methods to determine which one gives you a larger deduction. HOW WILL YOUR BUSINESS VEHICLE’S DEPRECIATION AFFECT YOUR TAXES? The term “depreciation” refers to the rate at which your vehicle loses its value as it gets older. If you plan on declaring your vehicle as a business vehicle for tax purposes, it’s important to understand how depreciation may affect your deduction. Depreciation is built into the standard mileage rate formula, so you do not need to figure out how much your vehicle has depreciated if you choose this method. However, if you choose the actual expenses method, you can claim depreciation as an auto-related expense, so you need to know how to calculate it. Just like other auto-related expenses, you can only claim a certain percentage of your vehicle’s depreciation on your taxes. The percentage you can claim will depend on what percentage of the time your vehicle was used for business purposes. The IRS has established depreciation limits that you must follow when preparing your taxes. For example, if you purchased a new vehicle in 2021, the maximum amount you are allowed to claim for depreciation on your taxes is $18,200. Make sure you are familiar with these depreciation limits so you don’t accidentally violate these rules. Business Vehicle for Taxes [https://blog.relaycars.com/wp-content/uploads/2022/03/Which-Business-Vehicle-Tax-Deduction-Method-Should-You-Choose.jpg] WHICH BUSINESS VEHICLE TAX DEDUCTION METHOD SHOULD YOU CHOOSE? Now you should have a better understanding of the two different methods that can be used to calculate your business vehicle’s tax deduction. There are pros and cons to each of these methods. But ultimately, the method you should choose will come down to who owns the vehicle and your role in the business as follows: * Self-Employed * Personal Vehicle Used by Employee * Company Vehicle Used by Employee SELF-EMPLOYED If you are self-employed and using your vehicle for business purposes, you can decide which method you want to use to calculate your business vehicle’s tax deduction. Some people may be able to deduct more by choosing the standard mileage rate, whereas others may benefit from choosing the actual expenses method. It’s best to work with an accountant to figure out which one will provide a greater tax benefit for you. It’s important to note that you are considered self-employed if you are the sole member of an LLC and you file a Schedule C along with your personal tax return. If you’re not sure whether you are considered self-employed or not, speak with your accountant. PERSONAL VEHICLE USED BY EMPLOYEE The rules are a bit different for people who are not self-employed. For example, say you are an employee of a company and you use your personal vehicle for business purposes. In this case, you are typically required to report the miles you travel for business purposes to your employer. Then, your employer will reimburse you for these miles using the standard mileage rate. So if you traveled 100 miles in a week for business purposes, your employer would add $56 (100 miles x $0.56= $56) to your next paycheck. In this situation, you cannot declare your vehicle as a business vehicle for tax purposes since you are already being reimbursed by your employer. However, if you were not reimbursed for the miles you traveled for business purposes, you can claim these expenses on your personal taxes. You can choose whether you want to use the standard mileage rate or the actual expenses method when calculating this deduction. But remember, this only applies if you were not reimbursed for your mileage by your employer already. Business Vehicle for Taxes [https://blog.relaycars.com/wp-content/uploads/2022/03/Company-Vehicle-Used-by-Employee.jpg] COMPANY VEHICLE USED BY EMPLOYEE The rules are also different for employees who are given a company vehicle to use when traveling for business purposes. In some cases, a company car that is given to an employee is treated as additional income to the employee. This is because the use of a company vehicle is often classified as a taxable employee benefit. If you are in this situation, you will not be able to declare your vehicle as a business vehicle for tax purposes. Because the vehicle is classed as a taxable employee benefit, you will need to declare a percentage of the vehicle’s value as income when preparing your taxes. Your accountant can help you with these calculations. If the vehicle is treated as income to the employee, the company that supplied the vehicle can deduct all auto-related expenses when preparing their taxes. The company does not need to figure out the business-use percentage when calculating this deduction. Instead, the company has the right to deduct 100% of the expenses. The tax laws regarding the use of a company vehicle are complex. For this reason, many companies prefer reimbursing their employees for using their personal vehicles for business purposes instead. HOW TO CALCULATE YOUR BUSINESS VEHICLE DEDUCTION FOR A LEASED VEHICLE The rules regarding how you can declare your vehicle as a business vehicle for tax purposes apply regardless of whether you lease or own your vehicle. If you use a leased vehicle for business purposes, you can choose either the standard mileage rate or actual expenses method when calculating your deduction. However, it’s important to note that once you choose the standard mileage rate method, you must continue to use this method in the future. You cannot switch to the actual expenses method in a later year. Furthermore, if you choose the standard mileage rate, you cannot deduct your lease payment. If you choose the actual expenses method, you cannot claim depreciation as an auto-related expense. However, you can deduct the business-use percentage of your monthly lease payment. Keep this information handy when you prepare your taxes so you can maximize your deductions and save money this tax season.
Five Reasons to Finance a Car through a Bank
January 19, 2022
The majority of car buyers finance their purchase with a car loan. There are a number of ways to secure a loan, though. Car buyers can visit the dealership to get financed, they can use an online site to find financing or they can get financed through a bank. The latter option is often the best option. In fact, there are five reasons to finance through a bank: * Banks could offer better interest rates * The experience may be more personable * Car buyers can shop around * The dealership visit can be shorter * Financing in hand gives buyers an easy out at the dealership DEALERSHIPS MIGHT UPCHARGE THAT INTEREST RATE Buyers might find that applying for financing at the dealership is incredibly convenient. This could allow buyers to just pick out their car and then get financed. While allowing the dealership to help find financing for the vehicle is convenient, it also could be more expensive. In some situations, the dealership might tack on a few percentage points to the bank’s interest rate for assisting with the financing. This is a fairly common practice. Those extra percentage points might mean more money for the dealership, but it also causes buyers to pay more each month for their vehicle. Dealership also could add in extra amenities into the loan, too. Real Car Tips explains that they could include warranties or GAP insurance. Finance a Car through a Bank [https://blog.relaycars.com/wp-content/uploads/2022/05/How-and-Why-Financing-From-a-Bank-Can-Benefit-Buyers.jpg] HOW AND WHY FINANCING FROM A BANK CAN BENEFIT BUYERS Securing a loan from a bank to purchase a vehicle allows car buyers to visit the dealership with their financing lined up. This enables them to know exactly how much they can spend and stick to that budget. Before visiting the dealership, though, buyers might want to use a car payment calculator to enter in their loan terms and work out how different car prices would impact the payment. Just because a buyer is approved for a specific loan amount doesn’t mean they have to borrow the maximum amount extended to them. Shopping for a less expensive car also could help buyers who might not have a lot of money for a down payment. While the loan covers the purchase price, Nerdwallet explains that the buyer needs to abide by the lender’s terms. The terms of the loan could stipulate a specific down payment and/or mileage and age of the vehicle. In addition, buyers also need to prepare for any tax that they might owe for their purchase. While buyers might be able to roll sales tax into the loan, this isn’t always an option. Buyers might be stuck with the full bill and the amount could be due before they are allowed to title or register their vehicle. Finance a Car through a Bank [https://blog.relaycars.com/wp-content/uploads/2022/05/Do-Banks-Offer-Better-Interest-Rates.jpg] DO BANKS OFFER BETTER INTEREST RATES? Dealerships can tack up a few percentage points for handling the loan search, and these extra points could impact that monthly payment. When applying for financing at a bank, though, interest rates that are offered to a borrower are typically cut and dry. The process to get pre-qualified also is pretty simple. The bank will run a credit check to review the individual’s credit score and credit report. Loan terms and interest rates may rely on this information. Those with high credit scores might secure the best rates and terms. Car buyers can visit the bank that they use personally or that they have financed with in the past. Perhaps the bank is their mortgage lender. Buyers can go through the pre-approval process to better understand the interest rates and terms for which they might qualify. This helps them also understand their potential car budget. A MORE PERSONABLE EXPERIENCE AT THE BANK Getting pre-approved for a car loan at a bank or credit union could be a more personable experience for buyers. Banks aren’t trying to sell anything, and buyers don’t have to worry about unusual markups or charges. While all consumers need to review the rates and terms of a loan, borrowers can ask the bank to explain any unclear details of the loan and/or the monthly payment obligations. Most loan officers, though, are pretty good about explaining all these details. In addition, if the rates at the bank aren’t great, the individual can move on. CAR BUYERS CAN SHOP AROUND Getting pre-approved for a car loan at a bank is considered a hard credit inquiry and it will slightly impact a consumer’s credit score. However, this inquiry is necessary for banks and credit unions to better understand an individual’s risk or creditworthiness. Nerdwallet recommends that buyers get pre-approved from two to three lenders. The site notes that if the credit inquiries for these lenders are made around the same time, they will hit the credit score as one inquiry. Getting multiple loan quotes allows buyers to find the lender and the loan with the best interest rate and terms. A SHORTER DEALERSHIP VISIT When buyers are pre-approved for financing, they can go into the dealership visit without worrying about the financing portion of the deal. This can allow the buyer to sit down with the sales team member and find the car that they want at the price they can afford. The dealership visit can focus on taking a test drive and finding the car with the ideal features that satisfies the needs of the buyer. Finance a Car through a Bank [https://blog.relaycars.com/wp-content/uploads/2022/05/Pre-Approved-Financing.jpg] PRE-APPROVED FINANCING CAN LET BUYERS AVOID SALES PRESSURE When buyers visit the dealership and have already been pre-approved for financing by a bank, the loan serves as the maximum price they are able to spend on their vehicle. Nerdwallet explains that this can give buyers an out for any upselling that the sales team member might try to push. When an extended warranty or other options push the car’s price too high, the buyer can just decline based on what they know about their financing. Getting pre-approved at a bank can provide more power and more buying confidence for the consumer. SOMETIMES THE DEALERSHIP CAN BEAT THE BANK’S RATES Getting financed with the help of a dealership isn’t always a bad deal. In fact, dealerships might be able to help a buyer secure financing that is better than what the bank could offer. Some dealerships might have a promotion for a 0 percent interest rate for qualified buyers. While these special promotions could require the loan to be a certain length, the 0 percent interest rate can be unbeatable. If the terms are right and the buyer can afford the payments, they will have a loan that allows them to pay only the principal on the car each month. Before getting too excited about 0 percent offers, though, buyers might need to ask about the qualifications and the terms. Some buyers might qualify but the monthly payments could be too high. HOW MUCH CAR CAN I AFFORD? Getting pre-approved for financing at a bank lets buyers know how much they can spend at the dealership. However, buyers don’t have to max out their loan. Nerdwallet recommends that buyers allocate less than 10 percent of their take-home pay for the actual car payment. However, the site notes that buyers should allocate less than 20 percent of take home pay for total car expenses (insurance, fuel, etc.). Knowing these recommendations can further help buyers understand their monthly budget. While, yes, the pre-approval helps them understand the bottom line budget, they still need to think about the cost of insuring the vehicle as well as other costs of car ownership. If the car payment plus those fuel and insurance costs seems to tip the scale, buyers might opt to purchase a less expensive car. Again, buyers don’t have to spend every cent for which they are approved. SAVE FOR TAXES AND OTHER FEES The bank may provide financing for the car loan, but buyers still have other costs related to that purchase. In some cases, the sales tax from the vehicle purchase cannot be rolled into the loan. The buyer might need to pay those costs in full before they can title or register their vehicle. Sales tax can be a big expense if the buyer isn’t prepared for it. In addition, buyers also need to pay for the registration and other fees (these, however, are typically not too expensive). Not all states charge sales tax for the purchase of a vehicle, so this is an expense that won’t affect buyers across the country. A TRADE-IN CAN HELP LOWER COSTS A lender might have stipulations related to a down payment when extending a loan offer. However, buyers can further decrease their purchase price if they offer a trade-in. Before visiting a dealership, buyers should use Kelley Blue Book (KBB) to research the price of their trade-in vehicle. KBB will ask the owner for the VIN or make/model. The site also will prompt the owner for details related to the car’s trim, features and condition. Car owners should be honest about the car’s condition. Otherwise the value estimate from KBB won’t be accurate. The purpose of researching the value of the vehicle is to find out if offers from the dealership are in line with the average trade-in value. Understanding the value of a trade-in can be a point of negotiation for buyers. If a dealership offers a low price for the trade-in, buyers might visit a different dealership or enter into negotiations to attempt to raise the price of the trade-in. DO BANKS OFFER THE BEST CAR FINANCING? There are a number of reasons why car buyers might consider getting pre-approved for financing through a bank. A bank or credit union might offer better terms and interest rates, the experience could be more personable and visiting the dealership with financing could give more power to the buyer. The bank doesn’t necessarily always offer the best rates, though. In some cases, the dealership might offer a 0 percent interest rate or even better terms. When it comes to financing a vehicle, buyers should shop around to ensure they find the best terms and interest rates.
Small SUVs Ranked by Towing Capacity
January 17, 2022
Sports utility vehicles (aka SUVs) are offered in small, midsize and full-size models. Larger models could be popular choices for those who need space for lots of passengers or individuals who need a decent amount of cargo room and strength for towing, too. Yet, car buyers who need to tow a small camper or a kayak but who can’t afford to spend the price for a large SUV model or who maybe don’t feel comfortable navigating such a large model could opt for a small SUV instead. Here are all the moderately-priced small SUVs ranked by towing capacity. A ROUNDUP OF ALL THE MODELS There are almost a dozen small SUV models on the market. Price ranges vary, but most hover in the mid-$20K range. Models offer similar towing capacities, too. Here are all the models sorted by maximum towing capacity (least to greatest). * 2021 Nissan Rogue MSRP: $26,050 Safety Rating: Top Safety Pick+ Towing Capacity: 1,350 pounds * 2022 GMC Terrain MSRP: $27,900 Towing Capacity: 1,500 pounds * 2022 Chevrolet Equinox MSRP: $25,800 Towing Capacity: 1,500 pounds * 2022 Honda CR-V MSRP: $25,750 Safety Rating: Top Safety Pick Towing Capacity: 1,500 pounds * 2022 Volkswagen Tiguan MSRP: $25,995 Safety Rating: Top Safety Pick (for 2021) Towing Capacity: 1,500 pounds * 2022 Ford Escape MSRP: $26,010 Safety Rating: Top Safety Pick Towing Capacity: 1,500 to 3,500 pounds * 2022 Subaru Forester MSRP: $25,195 Towing Capacity: 1,500 to 3,000 pounds * 2022 Kia Sportage MSRP: $24,090 Safety Rating: Top Safety Pick Towing Capacity: 1,653 pounds * 2021 Mazda CX-5 MSRP: $25,370 Safety Rating: Top Safety Pick+ Towing Capacity: 2,000 pounds * 2022 Hyundai Tucson MSRP: $25,350 Safety Rating: Top Safety Pick+ Towing Capacity: 2,000 pounds * 2021 Toyota RAV4 MSRP: $26,350 Safety Rating: Top Safety Pick Towing Capacity: 2,500 pounds THE SMALL SUV WITH THE BEST TOWING CAPACITY Car buyers looking for the best small SUV for towing have several choices. Both the Ford Escape and the Subaru Forester offer a towing capacity that varies from 1,500 pounds to 3,000 and the RAV4 offers a maximum towing capacity of 2,500 pounds. The Escape and the RAV4 also both received Top Safety Pick ratings from the Insurance Institute for Highway Safety (IIHS). In addition, all three models are comparable in price. The Subaru Forester is the least expensive option with a base price of $25,195. Small SUVs Ranked by Towing Capacity [https://blog.relaycars.com/wp-content/uploads/2022/01/Do-Other-Models-Pull-Their-Weight.jpg] DO OTHER MODELS PULL THEIR WEIGHT? The other remaining models offer around the same towing capacity—about 1,500 to 2,000 pounds. The Nissan Rogue offers the lowest towing capacity, pulling only 1,350 pounds. Since models are quite comparable in their towing capacity, buyers might look at price and safety or other features to guide their final purchase decision. The Hyundai Tucson, Nissan Rogue and Mazda CX-5 were rated the highest in safety by the IIHS, with a Top Safety Pick+ rating. Small SUVs are not designed, however, to tow massive loads. While these models could be fine pulling kayaks, canoes or other lighter items, they aren’t the option for buyers who need to pull large campers. Buyers may need to upgrade to a midsize model SUV, if they want a bit more power for towing. Luxury models like the Audi Q5 or the Land Rover Discovery Sport could be great choices—both can tow more than 4,400 pounds. The 2022 Audi Q5 received a Top Safety Pick+ rating from the IIHS; the model has a base price of $45,600. The Jeep Cherokee is the best mid-sized option for towing, though. The Cherokee can pull 4,500 pounds. The Cherokee also is moderately priced at $27,890. WEIGHING THE BEST OPTIONS Buyers might not be sure which model is right for their needs. With so many options with similar specs, it becomes a bit more difficult to find the best choice. Ultimately, the choice may come down to budget and the price that the buyer is willing to spend or can afford to spend. New models may be more expensive than used models. Used luxury models, however, could be priced higher. When setting a budget for a new car, though, experts recommend spending less than 10 percent of monthly take home pay on that monthly car payment, and the total cost of transportation should be kept to less than 20 percent of monthly take home pay. What is take-home pay? This is the amount that is left from a paycheck after taxes and other deductions (like medical insurance). Take-home pay is not the total salary an individual earns. Transportation costs related to car ownership include the monthly payment, the price of fuel (or electricity for eco models) and car insurance. In total, these expenses make up the price of the car each month. Car buyers tend to focus on simply the monthly payment when budgeting for a new car. They need to remember, though, that a new car might cost more to insure, which means monthly premiums might increase. Fuel needs also may be different. Small SUVs may be more fuel efficient than larger models. However, if a car owner is used to driving a small car, they may face increased costs at the pump by upgrading to a small SUV. For buyers that don’t know how much they may be able to secure in financing, Nerdwallet offers an easy tool to calculate how much a buyer could borrow based on their income and credit score. When using Nerdwallet’s tool, remember to follow the guidelines based on take-home pay. Small SUVs Ranked by Towing Capacity [https://blog.relaycars.com/wp-content/uploads/2022/01/Shopping-During-a-Supply-Crunch.jpg] SHOPPING DURING A SUPPLY CRUNCH Some buyers prefer new vehicles, but others are looking for the best price among pre-owned options. Buying new or used cars could just be a preference. When shopping used inventory, the age, mileage, make/model and condition all could impact the price of the vehicle. However, another major factor also can play a role: supply. When supply is low, buyers might not have much selection. Prices also could be higher. Car dealerships have faced times where car lots are nearly empty. When this happens, the buyer might have to purchase what they can find. This can make finding the best vehicle much harder, and it might be more difficult to find thrifty options, too. During times of supply crunch, buyers may need to do their research ahead of time. If they’re looking for a small SUV for towing, they may need to review all the options and have a backup plan in place. For those who really want a RAV4, they may be flexible and shop for a Honda CR-V. Many small SUVs are comparable in price and towing capacity. Buyers may have a brand loyalty or preference, but when supply is tight buyers may need to make a few concessions. Buyers shopping during a supply drought should know their needs, and have multiple backup models on their list in case their top choice is nowhere to be found on the lot. They also may research brands they’ve never purchased. Maybe a buyer is unfamiliar with Kia but knows that the brand offers a small SUV. Visit the manufacturer’s sites to learn all about the models. Then visit the IIHS and research safety ratings. EXPLORING THE OPTIONS ONLINE Many buyers begin their research process online. Sites like Kelley Blue Book (KBB) and IIHS can help buyers find specs and prices as well as safety data on the models that interest them. Dealership sites are the best destinations for uncovering available inventory. In addition, buyers may want to see what types of incentives and promotions each dealership is offering. RelayCars also can help buyers explore cars from home via augmented reality and 3D imagery. RelayCars offers an immersive library of thousands of cars. Just choose the model that the buyer wants to view and begin exploring. RelayCars gives users the option to view the vehicle via a 3D image or in augmented reality. With 3D images, the user can rotate a model image of the vehicle in 360 degrees; view the car from any angle. They also can choose to view the model in different paint colors. With augmented reality, the user can choose where they want to view the vehicle. Augmented reality uses the camera of a smartphone or tablet to superimpose an image of the vehicle in the user’s own environment. View the car in a bedroom, in the garage or see how it looks in the driveway. The car is displayed in full scale, and, using the camera function of the device, an individual can actually walk around the vehicle. This gives users an immersive way to explore the vehicle. Auto brands also could offer immersive augmented reality experiences. When buyers are researching their vehicle options, they can visit the manufacturer’s websites to explore any augmented or virtual reality viewing experiences. In addition, buyers also can visit YouTube to check out any videos about their favorite models. Some dealerships offer virtual test drives via YouTube. These videos can help buyers get a better understanding of the vehicle. Buyers who are only focused on the towing capacity of a small SUV, though, may find that their options are very similar in price and perhaps design, too. Using third-party sites and resources can help buyers gain more information about their options, especially if they need to have multiple backup options on their list during times of inventory shortages.
Top 10 Sports Cars With Great Gas Mileage
January 14, 2022
Nothing beats the feeling of hitting the open road behind the wheel of a sports car. This is a dream for so many people, but if you’re thinking about buying a sports car, you may have some reservations. For example, you may assume that all sports cars are gas guzzlers, but that’s not the case. You don’t have to choose between a fast, fun car and a car that gets good gas mileage. As it turns out, you can have both. Here are the top 10 sports cars with great gas mileage: Sports Cars With Great Gas Mileage [https://blog.relaycars.com/wp-content/uploads/2022/05/Honda-Civic-Si.jpg] HONDA CIVIC SI A Honda Civic probably isn’t the first vehicle that comes to mind when you think of sports cars. It’s true that the standard Honda Civic is a traditional sedan, but the Honda Civic SI is an exceptional sports car. The base model comes with a 1.5-liter four-cylinder engine that is capable of producing up to 205 horsepower. A turbocharged engine is also available on higher trim levels. Most models are designed with a continuously variable automatic transmission (CVT), however you can opt for a six-speed manual transmission if you prefer. Even though the Honda Civic SI is a fast sports car with crisp handling, it is surprisingly fuel efficient. You can expect to get about 32 miles per gallon in the city and 42 miles per gallon on the highway behind the wheel of a Civic SI. Sports Cars With Great Gas Mileage [https://blog.relaycars.com/wp-content/uploads/2022/05/Chevrolet-Camaro.jpg] CHEVROLET CAMARO The Chevrolet Camaro is one of the most famous classic American sports cars. It also happens to be one of the most fuel efficient. If you’re in a Chevy Camaro, you can drive about 22 miles per gallon in the city and 31 miles per gallon on the highway before you need to refuel. Even though the Camaro is fuel efficient, it is designed with all of the hallmarks of a sports car. You can choose from a wide range of powerful V6 and V8 engines, including one that produces up to 650 horsepower. However, this engine is not available on the base model, which comes with a turbocharged four-cylinder engine that produces up to 275 horsepower. This vehicle also goes from 0 to 60 miles per hour in just over five seconds, so you can hit the ground, or in this case, the road, running. Sports Cars With Great Gas Mileage [https://blog.relaycars.com/wp-content/uploads/2022/05/Mazda-Miata.jpg] MAZDA MIATA The Mazda Miata is a sporty convertible that offers passengers a fun and smooth ride. Don’t let its sporty look fool you, though. This vehicle is far more fuel efficient than it may seem. In fact, it’s one of the most fuel efficient sports cars on the market. You can get up to 26 miles per gallon in the city and 35 miles per gallon on the highway in a Miata. The Miata only seats up to two adults, so some people may find the interior a little cramped. However, it is built with a number of features to make your ride more enjoyable, including Android Auto, Apple CarPlay, and a user-friendly infotainment system. If you want to make your Miata look even sportier, opt for one of the Appearance Packages, which will add a spoiler, rear diffuser, and front air dam to your vehicle. Sports Cars With Great Gas Mileage [https://blog.relaycars.com/wp-content/uploads/2022/05/Toyota-Supra.jpg] TOYOTA SUPRA Toyota discontinued the Supra in 2002 but then relaunched it in 2020 due to an increase in consumer demand. Like the Miata, the Toyota Supra is a two-seater, so it’s not as spacious as some of the other sports cars on this list. Its small size is one of the many reasons why this vehicle is so fuel efficient. The Supra gets an average of 24 miles per gallon in the city and 31 miles per gallon on the highway. The Supra also accelerates faster than many other sports cars on the market. You can go from 0 to 60 miles per hour in an astonishing 3.8 seconds. You can choose from a number of different engines for your Supra. However, the base model comes with a turbocharged six-cylinder engine that is capable of producing up to 335 horsepower. Sports Cars With Great Gas Mileage [https://blog.relaycars.com/wp-content/uploads/2022/05/Hyundai-Veloster.jpg] HYUNDAI VELOSTER The Hyundai Veloster, which is a hatchback coupe, is not as well known as some of the other vehicles on this list. However, it’s one of the most impressive and fuel efficient sports cars available today. The Veloster has a starting price of just under $19,000, which makes it ideal for sports car lovers who are shopping for a new car with a smaller budget. This vehicle gets up to 28 miles per gallon in the city and 34 miles per gallon on the highway, so you won’t need to spend a lot on gas, either. The base model comes with a lackluster engine, so it’s recommended that you upgrade to the 1.6-liter turbocharged engine if you’re looking for more power. This engine is capable of producing up to 201 horsepower. Sports Cars With Great Gas Mileage [https://blog.relaycars.com/wp-content/uploads/2022/05/Ford-Mustang.jpg] FORD MUSTANG The Ford Mustang is another classic American muscle car that gets great gas mileage. You can expect to get up to 21 miles per gallon in the city and 32 miles per gallon on the highway behind the wheel of a Mustang. The Mustang seats up to four adults, so it offers a bit more room than the two-seater sports cars on this list. The interior is also designed with upscale materials and an infotainment system with an 8-inch touchscreen. Thanks to FordPass Connect, you can also use your smartphone to do things like lock and unlock your Mustang. Every Mustang, even the base model, comes with Ford’s CoPilot360 system. This system includes a number of safety features such as active drive assist, automatic high beam headlights, automatic emergency braking, forward collision warning, blind spot monitoring, and lane keep assist. Sports Cars With Great Gas Mileage [https://blog.relaycars.com/wp-content/uploads/2022/05/Volkswagen-GTI.jpg] VOLKSWAGEN GTI If you’re looking for a hatchback sports car with great gas mileage, look no further than the Volkswagen GTI. This vehicle comfortably seats up to five adults, so it’s somewhat bigger than the other sports cars on this list. It also offers far more cargo space than most sports cars on the market. Despite its slightly larger size, it still gets above average gas mileage. You can expect to get 24 miles per gallon in the city and 32 miles per gallon on the highway in the Volkswagen GTI. The GTI comes with a turbocharged engine that produces up to 228 horsepower. You can choose whether you want a manual or automatic transmission. The gas mileage is about the same for both options, so it all comes down to which type of transmission you prefer. Sports Cars With Great Gas Mileage [https://blog.relaycars.com/wp-content/uploads/2022/05/Audi-TT.jpg] AUDI TT If you’re interested in purchasing a luxury sports car that gets great gas mileage, the Audi TT is the perfect choice. This vehicle gets about 23 miles per gallon in the city and 30 miles per gallon on the highway. The base model comes with a turbocharged 2.0-liter four-cylinder engine that produces up to 228 horsepower. Other engines, including a turbocharged 2.0-liter four-cylinder with 288 horsepower and turbocharged 2.5-liter five-cylinder with 394 horsepower, are also available. Because the Audi TT is a luxury vehicle, it’s more expensive than most other vehicles on this list. The starting price of a TT coupe is just over $50,000, but if you want a convertible, you will have to pay at least $54,000 for a new model. Sports Cars With Great Gas Mileage [https://blog.relaycars.com/wp-content/uploads/2022/05/Subaru-BRZ.jpg] SUBARU BRZ The Subaru BRZ is a 2+2 sports car, which means it has two seats in the front for adults and two seats in the back for cargo or small children. Even though it’s not a luxury vehicle, it is still designed with many upscale features, including heated seats, a leather-wrapped steering wheel, and leather seats. All models, even the base model, also come with a user-friendly infotainment system with a 7-inch touchscreen. The base model is built with a 2.4-liter four-cylinder boxer engine that produces up to 228 horsepower. You can also choose between a six-speed manual or automatic transmission. Like the other sports cars on this list, the Subaru BRZ is incredibly fuel efficient. This vehicle gets about 24 miles per gallon in the city and up to 33 miles per gallon on the highway. Sports Cars With Great Gas Mileage [https://blog.relaycars.com/wp-content/uploads/2022/05/Lexus-LC.jpg] LEXUS LC The Lexus LC is one of the most luxurious sports cars on the market, so it comes with a hefty price tag. The base model starts at $93,000, but if you want a higher trim level, you will need to spend six figures. Luckily, you won’t need to spend a lot on gas if you purchase the Lexus LC. This vehicle gets about 26 miles per gallon in the city and 34 miles per gallon on the highway. The Lexus LC is powered by two electric motors and a V6 engine that produces up to 354 horsepower. Together, this hybrid system allows the Lexus LC to accelerate from 0 to 60 miles per hour in under five seconds. These are some of the many sports cars that get great gas mileage. By buying one of these cars, you can truly enjoy the best of both worlds.
What is the Best Mileage for a Used Car?
January 12, 2022
Shopping for a used car could require a bit more online research. Buyers might know the make and model they want, but they might need a specific price to fit their budget. They may need to look at the age of the vehicles, and used cars also can vary in the number of miles on their odometer. Price could differ because of mileage, age and condition, too. Of all these factors, though, mileage might be the most perplexing. What is the best mileage for a used car? Is there a mileage that buyers should absolutely avoid? Here’s how to decipher the numbers on the odometer! Best Mileage for a Used Car [https://blog.relaycars.com/wp-content/uploads/2022/01/Why-Mileage-Affects-Price.jpg] WHY MILEAGE AFFECTS PRICE When shopping for a used vehicle, a number of factors affect the price: make/model, age, mileage and condition. Older vehicles may be less expensive than newer models, but this isn’t always the case. For example, an older luxury car might be more expensive than a newer economical vehicle. Cars with damage or less than stellar interiors also may offer a lower price. There could be rips or other issues related to the overall appearance of the car. For obvious reasons, this doesn’t bode well for the value of the vehicle. Thus, the dealership will likely slice that price tag. Make and model also affects the price of used inventory for obvious reasons. Again, a luxury vehicle is going to be priced higher than a standard model. A minivan that is the same age as a compact car will typically be more expensive, too. Mileage is the final factor that can decrease or increase the sticker price. Why is mileage such an issue? Higher mileage means more wear and tear. As the mileage increases, the maintenance issues may also increase. When cars hit 100,000 miles, for example, there are a number of mechanical services that may be necessary. Drivers might consider the 100,000 mile marker as the car’s middle age. Car and Driver explains that today’s cars will drive up to 200,000 miles. Buying a car with six digits is a significant odometer reading, but is it a deal breaker? That really depends on the buyer. BEST MILEAGE ON A USED CAR FOR A COMMUTER Buyers will often turn to the used market to find a vehicle that’s more affordable. Some buyers don’t even consider a new model, because of the issues related to depreciation. For these buyers, used inventory is the better option. While a number of factors affect the price of a used car, buyers may zero in on the odometer when all other factors are equal. For commuters, choosing a used model that offers the lowest mileage might be ideal. What is the best mileage for a used car if the buyer needs that vehicle for a lengthy commute? The answer isn’t simple, because the buyer really needs to weigh the options of price and mileage and also understand how long they wish to keep that car. If the buyer is financing the car for three years, they will need to figure out if the car will even last that long. For example, if the car buyer commutes 100 miles round trip five days per week, they will drive about 2,000 miles per month or 24,000 miles each year. If the odometer of the used model is resting at 100,000 miles, that means the vehicle will rack up at least 60,000 miles over the life of the loan. While a vehicle could last up to 200,000 miles, there is no guarantee that it will last that long. Driving a car an extensive amount each day adds wear and tear on the vehicle. While every used vehicle should come with a report on its previous ownership and history, the buyer doesn’t know the driving habits of the previous owner. Did they commute daily? Did they service the vehicle regularly? For commuters who are buying a used vehicle, the mileage is important. Unfortunately, the mileage might not be the only consideration for the buyer. Price could impact what they choose, too. For this reason, one recommendation for a driver who needs a used car for a commute is to choose the model with the lowest mileage that fits within their budget. Buyers also can research safety ratings for different models via the Insurance Institute for Highway Safety to find their safest models. BEST MILEAGE ON A USED CAR FOR CITY DRIVERS City drivers are those who drive locally. These drivers may work near their home, or they may be retired or stay-at-home parents who don’t need to travel far during their daily routines. When buying a used car for local driving, does mileage matter? The odometer reading may still be a factor to consider, but it may matter less to city drivers than to those who have long commutes. Buyers still need to consider how long they plan to keep the vehicle. They also need to look at their budget needs and how this weighs against the odometer reading. If buyers are driving 10 miles a day on average, the mileage isn’t going to become such an issue. However, if buyers also plan to use the vehicle for road trips or more extensive travel, then mileage on a used model could be more of a factor. Like commuters, though, city drivers might look at both price and mileage and weigh their options accordingly. Best Mileage for a Used Car [https://blog.relaycars.com/wp-content/uploads/2022/01/Finding-the-Best-Used-Car.jpg] FINDING THE BEST USED CAR For many used car buyers, mileage will play into their final decision but so will price. Unlike new inventory, there are a number of factors that buyers will need to consider when purchasing a used vehicle. Some buyers can have their heart set on a specific make/model. Maybe they have a preference related to the type of car they drive. When searching for used models, though, sometimes the choices even with a single model can be really overwhelming. Prices can vary considerably. How do buyers sift through all their options? When shopping is used, buyers should understand where they are willing to compromise and where they will not budge. Some buyers might be willing to opt for an older model if it offers lower mileage. Other buyers might hunt for the newest models and not care about the mileage. Price and the budget may play into this decision, too. If buyers must have a low price, they will need to compromise in some areas. Again, buyers may find lower prices for cars that are older or that have higher mileage. However, lower prices also could be associated with economic models, too. Are buyers willing to sacrifice the model they want for a budget option? Would they rather choose an older luxury model than a budget-friendly newer economic vehicle? What about safety features? Newer models will typically offer better safety features. Do buyers want a backup camera or more modern capabilities? These are considerations buyers need to factor into their decision. IS FUEL EFFICIENCY MORE IMPORTANT THAN MILEAGE? Commuters may be curious if the fuel efficiency of a vehicle is more important than its mileage. If a car offers great fuel efficiency, does the mileage even matter? Hybrids and electric cars both get great energy efficiency. Since electric vehicles don’t use fuel, they don’t offer statistics related to miles per gallon (MPG). Instead, many include stats referring to the miles per gallon equivalent (or MPGe). Hybrids could travel 60 miles per gallon, but electric models might boast more than 100 MPGe. While this means that drivers won’t have to hit the pump or the plug as often, it doesn’t negate the odometer reading. Mileage still affects the value of the car and it still affects the life of the vehicle. Fuel efficiency can save money, but it won’t allow a vehicle to necessarily last longer. The electric plug isn’t a fountain of youth for an automobile! Instead of an engine that may fail, an electric vehicle will have a battery that needs to be replaced. As AutoTrader explains, batteries are constantly evolving and getting better. Older electric vehicles will offer less range than newer models. Is it cheaper to replace an older model’s battery or just replace the car? That could be the ultimate question for those who opt for used electric models. WHAT IS THE BEST MILEAGE FOR A USED CAR? There is no ideal odometer reading for a used car. Buyers need to weigh the mileage against other factors for the car. Age, mileage, condition and make and model all affect the price of that vehicle. Some buyers may be fine with a car with higher mileage if it fits into their budget. These buyers could be city drivers who don’t travel far for work or daily errands. Those with long commutes, though, might need a car with the lowest mileage that fits into their budget. Higher mileage on a used model could mean more money in upkeep if the driver uses the car for long commutes. In addition, that used purchase might not have a long life if it already has an odometer with six figures. Ultimately, buyers need to find the used model that fits their budget and their driving habits. Mileage is important to some buyers but isn’t a concern to others. The reading on the odometer is just one aspect to consider when buying a used model.
Which States Charge the Least, Most in Car Taxes?
January 10, 2022
You have to make a number of decisions when buying a car, including what body style best suits your lifestyle, where to buy the vehicle from, and of course, how much to spend. Many people focus solely on the purchase price when determining whether or not they can afford a vehicle. However, the purchase price is not the only cost you should consider. Most states charge sales tax on vehicles, which can increase the cost of buying a car by thousands of dollars. Each state sets its own sales tax rate, so the amount you will need to pay will vary depending on where you live. If you’re preparing to buy a vehicle, it’s important to understand which states have the least and most in car taxes so you know what to expect. WHICH STATES HAVE THE HIGHEST AND LOWEST VEHICLE SALES TAX RATES? State sales tax rates can vary from year-to-year. Currently, the states with the highest sales tax rates include: 1. Nevada: 8.25% 2. Kansas: 7.50% 3. California: 7.25% 4. Indiana: 7% 5. Rhode Island: 7% 6. Tennessee: 7% 7. Utah: 6.85% 8. New Jersey 6.63% 9. Georgia: 6.60% 10. Arkansas: 6.50% The states with the lowest sales tax rates include: 1. Alabama: 2% 2. Colorado: 2.90% 3. North Carolina: 3% 4. Oklahoma: 3.25% 5. Hawaii: 4% 6. Louisiana: 4% 7. New Mexico: 4% 8. New York: 4% 9. South Dakota: 4% 10. Virginia: 4.15% Which States Charge the Least, Most in Car Taxes [https://blog.relaycars.com/wp-content/uploads/2022/05/Which-States-Dont-Charge-Sales-Tax-On-Cars.jpg] WHICH STATES DON’T CHARGE SALES TAX ON CARS? There are also a number of states that don’t charge sales tax on vehicle purchases. These states are: * Oregon * New Hampshire * Montana * Delaware * Alaska If you live in one of these states, you won’t need to worry about paying sales tax when you purchase a new vehicle. VEHICLE SALES TAX RATES BY COUNTY/CITY Looking at the sales tax rates will give you a general idea of which states charge the most and least. However, it must be noted that vehicle sales tax rates typically vary by city or county, which means the sales tax rate doesn’t tell the whole story. For example, the state sales tax rate in Florida is 6%. However, the state allows local governments to collect up to an additional 1.5% on purchases. This means some cities in Florida, including Tampa and Jacksonville, have a 7.5% sales tax rate. If you register your vehicle in one of these cities, you will be charged the 7.5% rate instead of the state-wide 6% rate. For this reason, it’s important to look at the local sales tax rate rather than the state sales tax rate when determining how much you will need to pay after purchasing a vehicle. Which States Charge the Least, Most in Car Taxes [https://blog.relaycars.com/wp-content/uploads/2022/05/Can-You-Save-Money-By-Buying-Your-Vehicle-in-Another-State.jpg] CAN YOU SAVE MONEY BY BUYING YOUR VEHICLE IN ANOTHER STATE? There’s no doubt that some cities, counties, and states charge higher sales tax rates on vehicle purchases than others. If you live in an area with a high sales tax rate, you might be wondering whether you can save money by purchasing a vehicle in an area with a lower sales tax rate. For example, if you live in California, which has one of the highest sales tax rates in the country, you may be tempted to cross state lines and purchase a vehicle in Oregon, which does not charge sales tax on vehicle purchases. However, purchasing a vehicle in an area with a low sales tax rate does not necessarily mean you will save money. The reason for this is simple. The sales tax rate you are charged will depend on where you register your vehicle, not where you purchase it. If you purchase the vehicle in Oregon, you will still need to register it in your home state of California, which means you will be charged the local sales tax rate, not Oregon’s sales tax rate. The bottom line? You can’t avoid paying sales tax on your vehicle simply by traveling to a state that charges a lower sales tax rate or does not charge sales tax at all. HOW TO SAVE MONEY ON TAXES WHEN BUYING A CAR Traveling to an area with a lower sales tax rate won’t help you save money on taxes when buying a car. Fortunately, there are a number of other ways to reduce your tax bill when you purchase a vehicle. You may qualify for a tax break if: * You are disabled. If you meet your state’s definition of “disabled,” you may be exempt from paying sales tax on your vehicle regardless of what the sales tax rate is in your city or county. * You’re buying an older car. If your vehicle was manufactured prior to 1973, it is classified as a historic vehicle, which means it is exempt from sales tax. * You’re moving to another state. If you’re planning on permanently moving to a state that does not charge sales tax on vehicle purchases, you won’t have to pay sales tax on your vehicle. However, the move must take place within 90 days from the date the vehicle was purchased. * You itemize your deductions. If you itemize your tax deductions, you may be able to deduct your vehicle sales tax expenses. However, if you deduct your sales taxes, you cannot deduct your state or local income taxes, so make sure you run the numbers to determine which option is best for you. * You use your vehicle for business purposes. If you purchased a vehicle to use for business purposes, you may be able to deduct a certain percentage of the cost. The vehicle must meet certain requirements, so discuss this with your accountant to figure out if you qualify. You may also qualify for tax credits at the state and federal level if you purchase an electric vehicle. For example, if you purchase a new electric or plug-in hybrid vehicle, you may be eligible for a federal tax credit of up to $7,500. The credit amount will vary depending on the vehicle’s battery capacity. You will still have to pay sales tax on your vehicle, but getting this tax credit will offset the cost. You must meet certain requirements to qualify for this federal tax credit. For instance, the IRS will only allow the original buyer of the electric vehicle to claim this tax credit. If you purchase a used electric vehicle, you won’t qualify for this federal tax credit since you are not the original buyer. Talk to your accountant to learn about other conditions you must meet to take advantage of this credit. Some states also offer financial benefits to people who purchase electric or hybrid vehicles. In California, for instance, you can earn a rebate of up to $1,000 if you purchase a plug-in hybrid electric vehicle. The rebate increases to $2,000 if you purchase an electric vehicle and $4,500 if you purchase a fuel cell electric vehicle. Just like the federal tax credit, this rebate won’t eliminate your sales tax bill, but it will help you pay for it. If you live in California, you may also qualify for the state’s Clean Fuel Reward. This financial reward is available to anyone who buys a new electric vehicle with a battery capacity greater than 5kWh. The vehicle must be purchased from a participating retailer and registered in the state of California. If you qualify, you could receive an instant reward of up to $750, which you can use to cover a portion of your sales taxes. Before you start shopping for a new car, do your research to figure out if your state offers any financial incentives for purchasing an electric or plug-in hybrid vehicle. Which States Charge the Least, Most in Car Taxes [https://blog.relaycars.com/wp-content/uploads/2022/05/Which-States-Have-the-Highest-and-Lowest-Car-Ownership-Costs.jpg] WHICH STATES HAVE THE HIGHEST AND LOWEST CAR OWNERSHIP COSTS? Sales tax isn’t the only expense you will incur if you own a vehicle. There are a number of other vehicle ownership costs, including the cost of fuel, insurance, maintenance and repairs, and registration. Just like sales tax rates, these ownership expenses can vary depending on where you live. In other words, it’s much cheaper to own a car in some states than it is in others. According to one study, Louisiana has the highest car ownership costs of all 50 states. In Louisiana, you should expect to pay these expenses if you own a vehicle: * Taxes: $3,615 * Insurance: $2,113 * Maintenance and repair: $389 * Fuel: $1,051 * Registration: Varies depending on the sales price of the vehicle * Title costs: $69 * Vehicle property tax: $38 In sum, the average annual cost of owning a vehicle in Louisiana is about $14,965. This same study found that Oregon has the lowest car ownership costs of all 50 states. On average, Oregon vehicle owners pay: * Taxes: $0 * Insurance: $1,220 * Maintenance and repair: $390 * Fuel: $1,085 * Registration: $86 * Title costs: $77 * Vehicle property tax: $0 In sum, the average annual cost of owning a vehicle in Oregon is about $10,510. Now you should have a better understanding of how much you will need to pay in sales tax and other ownership costs once you purchase a vehicle. Keep this information in mind to ensure you choose a vehicle that you can afford.